Most PPC Macs cannot boot OSX from USB, they need Firewire... that being said, out of 13 PPC Macs I had one that booted from USB Drives, including Flash Drives, it was my eMac/1.42GHz as a matter of fact, USB drives would show as a boot choice if I held the Option/alt key at bootup, (nowhere else), but It lost that ability when I reset the NVRAM.
The USB boot workaround that works for some is...
Connect the drive to your machine, and find out which partition the OS X system is installed on. I usually find this by going to Disk Utility and looking at the info for the partition on the USB disk with OS X. That is, disk2s3 is usually for a USB disk with no OS 9 drivers installed that is the second disk disk. disk3s9 might be a USB disk with OS 9 drivers that is considered the third disk. There are other ways of finding this out, but in my case, my disk is disk2s3 (the 3 on the end will come into play soon).
Start up the machine in Open Firmware (this is the fun part). Hold Command-Option-F-F right after the machine is turned on.
Here is the moment of truth. If this step does not work, I have had very limited success getting a machine to boot off USB2. In Open Firmware, type devalias, and you should get a list as output. In this list, look for ud, usually below where you see hd (ud is "USB Disk," I presume). If found, it will usually have beside it /pci@f2000000/usb@1/disk1, or something similar. Again, if you see this, I have not had this fail yet.
Now type printenv boot-device, which will usually get you output of boot-device hd:,\\:tbxi. (See where this is going yet?)
Type setenv boot-device ud:3,\\:tbxi where the number after the colon corresponds to that partition number we found in step two. You should get an ok back.
Type printenv boot-device, and you should see the change displayed already. Something like:
boot-device ud:3,\\:tbxi hd:,\\:tbxi"
http://hints.macworld.com/article.php?story=20060301112336384
You'd need to clone the Install Disc to a Flash Drive, or make a DMG of it then Restore it to the Flash drive.